UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-QSB
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from _____to _____
For the quarterly period ended: 6/30/2002
Commission File No.: 0-6421
SYNERGISTICS, INC.
Massachusetts 04-2283157
(State of Incorporation) (IRS Employer I.D. Number)
9 Tech Circle, Natick, MA 01760
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number (508) 655-1340
Indicate by check mark whether the registrant (1) filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act during the preceding
12 months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements
for the past 90 days. [ ] Yes [ X ] No
Indicate the number of shares outstanding of each of the registrant's classes
of common stock, as of the latest practicable date.
Common Stock $0.01 Par Value 10,285,806 shares
outstanding as of July 31, 2002
Transitional Small Business Disclosure Format (check one);
[ X ] Yes [ ] No
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
SYNERGISTICS, INC.
BALANCE SHEET
ASSETS
(UNAUDITED)
30-Jun-02 31-Dec-01
CURRENT ASSETS
Cash $ 48,674 $ 74,294
Accounts receivable 404,280 367,219
Allowance for doubtful accounts (24,804) (20,000)
Inventories 284,185 322,708
Prepaid expenses 14,040 19,127
-------- --------
TOTAL CURRENT ASSETS 726,375 763,348
EQUIPMENT, less allowances of
$101,068 and $96,826 for depreciation 22,143 23,497
DEFERRED TAXES 355,500 355,500
--------- ---------
TOTAL ASSETS $1,104,018 $1,142,345
========= =========
LIABILITIES, PREFERRED STOCK
AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable 256,272 229,783
Accrued expenses and other
current liabilities 72,195 113,837
Amount due stockholder 100,000 100,000
--------- ---------
TOTAL CURRENT LIABILITIES 428,467 443,620
STOCKHOLDERS' EQUITY
Common stock (10,285,806 shares issued
including shares held in Treasury) 102,858 102,858
Additional paid-in capital 7,567,355 7,567,355
Retained earnings (deficit) (6,987,527) (6,964,353)
--------- ---------
682,686 705,860
Cost of Common Stock held in Treasury (7,135) (7,135)
--------- ---------
675,551 698,725
--------- ---------
TOTAL LIABILITIES, PREFERRED STOCK
AND SHAREHOLDERS' EQUITY $1,104,018 $1,142,345
========= =========
SYNERGESTICS, INC.
STATEMENT OF OPERATIONS
Six Months Ended June 30,
Unaudited
2002 2001
Sales, net 1,498,449 1,110,736
Interest income 140 352
--------- ---------
1,498,589 1,111,088
Costs and expenses:
Cost of sales 1,052,848 857,464
Selling, general and administrative
expenses 468,352 540,539
Interest expense 563 1,265
--------- ---------
1,521,763 1,399,268
Net gain (loss) (23,174) (288,180)
Gain (loss) per share of Common Stock
Assuming no dilution ($0.00) ($0.03)
Assuming full dilution ($0.00) ($0.03)
SYNERGISTICS, INC.
STATEMENT OF CHANGES IN FINANCIAL POSITION
Six Months Ended June 30,
Unaudited
2002 2001
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (23,174) $ (288,180)
Adjustments to reconcile net loss to net
cash (used) provided by operating activities:
Depreciation 4,242 9,000
(Increase) decrease in accounts receivable (32,257) 56,121
(Increase) decrease in inventories 38,524 52,639
(Increase) decrease in prepaid expenses
and other assets 5,087 (9,580)
Increase (decrease) in accounts payable 26,489 15,233
Increase (decrease) in accrued expenses
and other current liabilities (41,643) (64,089)
Increase (decrease) in amounts due
shareholders 0 200,000
--------- ---------
TOTAL ADJUSTMENTS 442 259,324
--------- ---------
NET CASH USED BY OPERATING ACTIVITIES (22,732) (28,856)
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (2,888) (2,204)
--------- ---------
NET CASH (USED) BY INVESTING ACTIVITIES (2,888) (2,204)
--------- ---------
NET CHANGE IN CASH (25,620) (31,060)
CASH AT BEGINNING OF YEAR 74,294 64,880
--------- ---------
CASH AT END OF PERIOD $ 48,674 $ 33,820
========= =========
SYNERGISTICS, INC. SELECTED INFORMATION
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that these financial
statements be read in conjunction with the financial statements and notes
thereto included in the Company's Annual Report Form 10-KSB. The results of
operations for the period ended September 30, 2001 are not necessarily
indicative of the operating results for the full year.
Basis of Presentation. It is the opinion of
management that all significant adjustments which are routine recurring
adjustments which are necessary to present fairly such interim financial
statements are reflected in the accompanying September 30, 2001 financial
statements.
Accounting Policy for Revenues and Costs of Sales. Revenues are
recognized at the time of product shipment. Cost of sales is computed using
the gross profit method based upon historical results of operations. Other
cost, included in costs of sales, are based upon such costs as actually
incurred.
Inventories are comprised of the following*:
30-Jun-02 31-Dec-01
Raw Materials 40,785 48,406
Finished Goods & WIP 243,400 274,302
--------- ---------
Total Inventories 284,185 322,708
*Allocation Based Upon Estimate
(Loss) per Common Share
The weighted average number of shares of common stock outstanding used in
computing (loss) per share does not include the effect of the conversion of
the stock options as the exercise price exceeds the current market value of
the security. The following schedule sets forth the number of shares used
in computing earnings per share:
Six Months Ended June 30,
Unaudited
2002 2001
Assuming no dilution
Common Stock Outstanding June 30, 2002 10,285,806 9,632,561
Shares held in Treasury 16,445 16,445
Total Shares Authorized 12,000,000 12,000,000
Item 2. Management's Discussion and Analysis or Plan of Operation.
For the six months ended June 30, 2002, the Company recorded sales of
$1,498,449 compared to $1,110,736 for the six months ended June 30, 2001.
In the 2nd Quarter of the year 2002 sales increased by 35% compared to
the 2nd Quarter of the year 2001. The increase in sales was due to
a 450% increase in foreign exports.
At June 30, 2002 the Company had a backlog of $71,366 compared
to $184,798 at June 30, 2001.
Cost of sales as a percentage of sales decreased to 70% from 77%
for the six months ended June 30, 2002 and 2001, respectively. This
is mainly due to a significant increase in sales with labor and material
costs remaining somewhat constant.
For the period of six months ended June 30, 2002, selling and general
and administrative expenses decreased by 13% over the period of six
months ended June 30, 2001. This was mainly due to a decrease in
advertising and elimination of most of the sales reps in the
2nd Quarter of 2001.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
No material legal proceedings are pending to which the Company is a
party or to which any of its property is subject.
Item 2. Changes in Securities and Use of Proceeds
There have been no changes in the instruments defining the rights
of holders of any class of securities of the Company during the
first three months of calendar year 2002.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted to a vote of the security holders during
the 2nd Quarter of 2002.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Date July 19, 2002 By: /S/WILLIAM M. TETRICK
William M. Tetrick
Chairman of the Board
Date July 19, 2002 By: /S/DAVID S> LONGWORTH
David S. Longworth
President and Clerk